After getting a long-awaited green light last week to start exploring its Stansmore niobium-rare earths project in Western Australia’s West Arunta region, Lycaon Resources is now building a war chest to fuel its mission.
The company today revealed it had completed a $2.5 million capital raise and also secured a $180,000 State Government grant to drill two holes to test the centre peak of two different magnetic anomalies its Stansmore and Volt prospects. Lycaon says it was awarded the maximum grant under the State’s co-funded exploration incentive scheme (EIS) to test the deposits.
Management says the two proposed holes will be drilled beneath cover that is obscuring radiometric responses and will test for iron-oxide alteration, copper, gold, niobium and rare earths mineralisation.
The Stansmore target is a prominent 700m-long magnetic feature, while Volt is a bigger magnetic anomaly about 3km in width. The company says recent discoveries by WA1 Resources and Encounter Resources have demonstrated the potential for the West Arunta region to host significant niobium and rare earths mineral systems.
WA1 has recorded some outstanding hits in recent months at its nearby Luni target including 7m at a mammoth 10 per cent total rare earth oxides (TREO) from 58m. Recent niobium hits are as high as 3m at 4 per cent from 28m, 73m at 0.8 per cent from 57m and 7m at 3.6 per cent from 58m.
Sitting next door to WA1’s holdings, previous drilling by Encounter has returned 12m at 2.3 per cent niobium pentoxide at the Emily prospect and a broad 282m going 0.54 per cent niobium pentoxide from the Crean prospect.
In addition to the two State-supported drillholes, Lycaon will sink a further five holes to test the magnetic gradient of the main anomalies identified from a recent aeromagnetic survey.
The company says it has secured firm commitments to raise the $2.5 million through the placement of about 8.93 million shares at an issue price of 28c per share. The funds will be used to finance exploration programs at Stansmore.
In the past fortnight, management has received crucial approvals allowing it to kick off exploration activities from WA Mines Minister David Michael and Aboriginal Affairs Minister Tony Buti.
Lycaon Resources technical director Thomas Langley said: “We are now in the fortunate position, having developed positive relationships with the Parna Ngururrpa traditional owners, to be the first explorer to drill-test some of the most interesting geophysical features in the West Arunta outside of WA1 Resources’ world class Niobium carbonatite discovery.”
The EIS funding program is a WA Government initiative that aims to encourage local exploration for the long-term sustainability of the State’s resources sector. The scheme is a competitive program that is open for applications twice a year.
It offers up to a 50 per cent refund for innovative exploration drilling projects, capped at $180,000 for a multi-hole application.
The latest announcements today prompted a surge of market interest in Lycaon, with its share price jumping almost 20 per cent from a previous close of 33c to touch 39.5c during intraday trading. Nearly 3.2 million shares changed hands in the company’s biggest trading day in a year.
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By Michael Philipps
